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Doha Talks Near Tipping Point

Geneva, Switzerland.
by Donna Borak
UPI Business Correspondent
Washington (UPI) Mar 28, 2006
Trade ministers are expected to convene in Geneva at the end of April to formalize tariff schedules that will help eliminate trade barriers in the world's richest agriculture-producing nations and reduce high tariffs in industrial goods from emerging developing countries.

But with trade ministers pointing to more disappointment than progress, it appears striking a deal by the April deadline may be unlikely.

Trade chiefs from the 'Group of Six' nations have for the last several months been trying to hammer out formula cuts in two of the most sensitive areas in negotiations: agriculture and industrial products. Economic leaders from the World Trade Organization's 149 countries agreed last December during the Hong Kong ministerial to meet by the end of April to secure formalized tariff cuts in these two highly disputed areas.

However, if negotiators are unable to meet the April deadline, it will severely jeopardize trade ministers' ability to complete other areas of negotiations like rules and services during the summer and tie up schedules during the fall months.

"If we don't make progress on the modalities we will not be able to meet the year-end deadline because its just takes that much time to go through the thousands of tariff lines and make sure that we're all in agreement by year end," said Rob Portman, U.S. Trade Representative, last week before the U.S. agriculture business community.

Meeting the end-of-the-year deadline is of vital interest to the United States as it faces the expiration of its Trade Promotion Authority in mid-2007. U.S. law offers the administration wide powers to pass trade legislation in Congress. Portman has called for a quick renewal of TPA by Congress, but there has been some concern that it will take longer to reinstate the law as in previous times. The last time TPA expired it took eight years before it was renewed by Congress.

With pressure by Congress to wrap up the deal by the end of the year, Portman has characterized the April 30 deadline as the "drop dead date."

"If we miss our year-end deadline, then we'd be risking not getting it in under the TPA window in the United States, and therefore having a difficult time knowing when we could bring this trade agreement to its implementation stage," said Portman.

But with little progress being made by negotiators to narrow differences on remaining issues, there have been some suggestions that the April 30 deadline may in fact be postponed to a later date.

Whether or not World Trade Organization head Pascal Lamy decides to postpone talks in Geneva to a later date when negotiators can firm up formulas, there is an ever-growing sense that time is running out to complete the round.

"We have no more time to lose," warned Lamy last week. "The possibility of closing a deal -- deciding on whether to succeed or to fail in the negotiations started over four years ago now -- will be decided in the coming 40 days."

While Lamy called on all members to move "in concert" on all areas of negotiations, he urged emerging developing countries like India and Brazil to show greater flexibility in liberalizing trade in industrial goods.

Trade negotiators have been critical of India and Brazil for blocking talks due to their intransigence over making greater tariff cuts in industrial goods. The European Union, which has been labeled the scapegoat for much of the round, has been reluctant to reduce its agriculture subsidies unless it sees more movement from emerging developing countries.

European Trade Commissioner Peter Mandelson will be holding discussions with counterparts from Brazil this week hoping to reach some progress.

The European Union has not been the only one critical of big developing countries. Senator Charles Grassley, R-Iowa, chairman of the U.S. Senate Finance Committee, described last week's talks with Brazil as disappointing.

"Brazil has really compromised their position in the Doha Round of negotiation by having their feet in both camps. They have an advanced agricultural sector, but they act like a developing country when it's convenient for them," said Grassley.

Unlike multilateral trade rounds in past years, where the onus of achieving a breakthrough rested on major developed economies like the United States and the European Union, the responsibility now rests on all members of the WTO to reach consensus.

"The days are gone when the EU and U.S. could reach agreement -- as with the Uruguay Round -- and expect other nations simply to go along with it," wrote Stuart Eizenstat and Hugo Paemen, co-chairman of the European-American Business Council, in the Financial Times.

"But it remains true that unless the EU and U.S. can settle differences over agriculture and demonstrate leadership, other members will not act 'in concert.' The Doha round is a negotiation in which all parties must make tough decisions and accept compromises -- to 'give' in order to 'get'," they said.

Source: United Press International

Related Links
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EU Rethinks Trade Strategy
Washington (UPI) Mar 23, 2006
With only modest results expected to be reached at the conclusion of the Doha negotiations, the European Union has begun to rethink its bilateral trade strategy -- especially among Asian countries.







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